The Sydney kitchen hand accused of stabbing businessman Morgan Huxley to death told police two weeks later he had never met his alleged victim and was "horrified" to learn he had been murdered.

Daniel Jack Kelsall, 22, is accused of following Mr Huxley to his Watson Street flat and fatally stabbing him in the early hours of September 8, 2013.

The 22-year-old has pleaded not guilty to charges of murder and indecent assault.

On Friday, the jury in Mr Kelsall's Supreme Court murder trial was played a video of the police interview the 22-year-old voluntarily undertook on September 24.

Dressed in black, Mr Kelsall told the officer in charge of the case that he had seen a man without shoes, who he later found out was Morgan Huxley, trying to get money out of a convenience store ATM shortly after he had finished working at the Sydney Cooking School about 1am.

"I saw 'shoe-less guy', that's what I called him, trying to get money out of the machine - I thought it was very funny," he told the officer in charge,  Detective Senior Sergeant Mark Dukes.

"Had you ever seen him before?" Detective Dukes asked.

"Not to my knowledge," the 22-year-old replied.

The court has heard that CCTV footage appears to show Mr Kelsall following Mr Huxley through the streets of Neutral Bay.

But he told police during the interview that he had simply been walking in the same direction, and at a certain point had diverted onto a different path.

He said that over the next hour or so he had taken a circuitous route back to the home he shared with his parents, explaining that, despite being cold, he had been "distracted" by items left on the side of the road for an upcoming council clean-up.

He had fallen a asleep soon after hearing police sirens about 3am.

It was not until he had a conversation with a barista named 'George' at his local cafe the next day that he discovered "someone" had been murdered, Mr Kelsall claimed.

"I was horrified," Mr Kelsall said.

"What did you think about it?" Detective Jukes asked.

"I had no idea who was murdered, what had happened," he said.

The court has previously heard that in May 2012, Mr Kelsall told a doctor and a psychiatrist that he had "intrusive thoughts" about stabbing someone on the way home from work at night.

He told psychiatrist Matthew Boulton that he had thought about "killing someone else for the thrill of it" and it would "probably be a total random with a knife", the court heard.

But when asked if he wanted to kill someone, Mr Kelsall had replied "absolutely not".

The trial continues.